2003 (3) TMI 13

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....ncluded while considering the investment in plant and machinery for the purpose of section 80HHA of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to the benefit of section 80HHA of the Income-tax Act?" The brief facts necessary for the purpose of this case are as follows: The respondent-assessee in both these cases is one and the same. It is a private limited company engaged in the manufacture and sale of PVC pipes. The assessment years concerned are 1992-93 and 1991-92, respectively. In the assessment for the aforesaid years the assessee claimed the status of a small-scale industrial unit for availing of the benefit of deduction under section 80HHA. The Assessing Office....

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....n the basis of the said retrospective amendment submits that the basis of the determination of the status of the assessee as a small-scale industrial undertaking has been changed from the method provided earlier under sub-section (2) of section 80HHA and neither the Assessing Officer nor the two appellate authorities had occasion to consider the question in the light of the amended provisions. We have considered the aforesaid submission, Under sub-section (1) of section 80HHA, where the gross total income of an assessee includes any profits and gains derived from a small-scale industrial undertaking to which this section applies, a deduction from such profits and gains of an amount equal to twenty per cent. thereof was provided in accord....

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....s of clause (iii) of this sub-section, the condition specified therein shall be deemed to have been fulfilled," Explanation (b) to section 80HHA inserted by the Finance Act, 1999, which is relevant for the purposes of this case reads: "an industrial undertaking shall be deemed to be a small-scale industrial undertaking which is, on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951)." Here it must be noted that the Assessing Officer and the two appellate authorities had considered the question as to whether the cost of generator will form part of the plant and machinery of the said unit since Explanation (b) to se....